July 25, 2024

Insurers to launch affordable and simplified ‘essentials’ coverage

Car insurance premiums have increased by 67% on average in the past year. Insurers are now offering new “essentials” cover options to provide more affordable alternatives. This information comes from analysis by Fairer Finance.

It’s important for insurers to be transparent about what these stripped-back policies include and exclude, so consumers can make informed decisions.

60% of the largest 10 car insurers now offer ‘essentials’ policies, signaling a shift towards budget-friendly options. These policies offer more coverage than basic third-party, fire, and theft policies but may lack features found in standard car insurance policies.

Common exclusions in ‘essentials’ policies

Typical exclusions in these policies include windscreen cover, stolen key replacement, courtesy cars, and the uninsured driver promise (which guarantees to reinstate no-claims discounts and reimburse excess in accidents with uninsured drivers).

Admiral, Ageas, Hastings, Churchill, Sainsbury’s, Geoffrey Insurance, Boom, and Moja are among the insurers offering or introducing ‘essentials’ policies.

James Daley, Managing Director at Fairer Finance, stated: “Many insurance brands now have multiple tiers of cover to cater to different customer needs. It’s crucial for insurers to clarify the inclusions and exclusions of these policies to avoid confusion among consumers.”

“Since many people opt for ‘essentials’ cover due to lower prices, it’s essential for insurers and comparison sites to clearly communicate the limitations of these policies upfront. Trust in the industry will suffer if these issues are not addressed,” added Daley.

The Fairer Finance Trust in Insurance Index reported a decline in consumer trust in car insurance, accompanied by rising premiums. This shift in sentiment reflects dissatisfaction with increasing costs.

Frequently Asked Questions

What are ‘essentials’ policies in car insurance?

‘Essentials’ policies are stripped-back and low-cost alternatives offered by insurers to provide more affordable coverage options. They typically offer more than basic policies but may exclude certain features found in standard car insurance.

How can consumers ensure transparency with ‘essentials’ policies?

Consumers can ensure transparency by carefully reviewing the inclusions and exclusions of ‘essentials’ policies before making a decision. It’s important to understand what is covered and what is not to avoid any surprises when making a claim.


As car insurance premiums continue to rise, the introduction of ‘essentials’ policies provides consumers with more affordable options. However, it’s crucial for insurers to be clear about the limitations of these policies to maintain consumer trust. By understanding what these policies include and exclude, consumers can make informed choices that meet their needs.

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